Dissolving a marriage is never an easy process; for many people, divorce can be one of the most emotionally taxing times. Not only are you going through a major emotional transition, but almost every detail of your life will change, including your schedule, your routines, and your living arrangements. With careful planning and the right team by your side, however, you can prepare for the financial considerations you may face during a divorce.
This is important to think about. When you’re already going through a large transition, the last thing you want to do is pile on more stress. By taking the time to think through your financial planning needs, you can make the divorce process a lot easier on yourself and your family.
The most important aspect to think about – and we’ll get into this more in a moment – is having the right team on your side. At Diamond Legal, our legal team has decades of experience in helping families navigate the details of divorce and estate planning. In other words, we’ve seen it all and we’re ready to put our experience to work for you.
A Strong Team on Your Side
One of the most important things to realize when you start the divorce process is that you shouldn’t try to do any of this alone.
You need a strong team on your side, starting with your legal team. You should not only have an experienced divorce attorney, but also an estate planning attorney. (We offer you both, under the same roof!)
Each attorney will help you navigate different areas of the financial details. Your divorce attorney will help protect your rights and assets during the settlement negotiations, and your estate planning attorney will help you protect your assets and your family in the years to come.
In addition to your legal team, you should also consider enlisting the services of a financial adviser, a tax planner, and a life insurance agent. We work with some of the best financial professionals in the area – we’re happy to refer you to people who will do a great job for you!
Create a New Budget
One of the realities of divorce is that you’ll no longer be operating on two incomes. Although maintenance (alimony) may be part of the final divorce settlement, we recommend that you take some time to figure out what your budget may look like during and after your divorce.
Being intentional about creating this initial budget can help you design a plan to move forward with your life. It can also help you spot any potential issues so that you and your attorneys can discuss them up front.
Agree on as Much as Possible
Divorce can be expensive, but it doesn’t have to be. There are ways to get through the process for a lot less than you might think, and our legal team can help you do it.
When both parties agree on the majority of the issues at hand, both can save quite a bit of money. When things get contentious, they also tend to get expensive, as litigation and additional discovery, expert witnesses, etc. become necessary.
If you are facing a contested divorce, even a potentially messy one, rest assured that our team is here to help you through each step. We’ll always be up front with you about costs and seek out ways to save you money. The fact remains, however, that litigation is more expensive than an uncontested divorce.
If you and your spouse are able to agree on the majority of your settlement, our legal team can often help you come to an agreement on the remainder of the issues and save both time and money. Whenever this is possible, we’re happy to do so.
Asset Division Considerations
In a divorce, the goal is to split the marital assets as evenly as possible. How this is done can have a significant impact on your taxes, however – and an experienced attorney can help you navigate the details with confidence.
There are several things to consider, including:
- The liquidity of the assets
- Whether to keep or sell the marital home
- Cash flow needs, both in the short term and years down the road
- Qualifying for a mortgage on post-divorce income
- Separation of your marital investment portfolio
Each of these considerations comes with its own tax implications, which your attorneys and your financial professionals can advise you on.
Document and Disclose Everything
During a divorce, it will become necessary to disclose your financial details (including any accounts or assets your spouse may not be aware of). Because of this, you’ll want to start gathering documents as soon as possible. It’s a tedious task, and not one that you want to try to complete at the last minute.
You will also find it helpful to document as much as possible during the proceedings, as the court does not tend to look kindly on what may be seen as trying to hide information. Having all of your records readily available will also help the process move along more quickly, which will cost you less money in the end.
Your attorney can advise you on what and how to document as well as which records to have available. If you have questions on this, please give us a call – we have a free planning resource that we’re happy to send you.
Update Your Estate Plan
Something that many people overlook during the divorce process is the need to update their beneficiaries and estate plan. This is something our estate planning team can help you do!
There are a lot of details that go into this, and many of them are easy to overlook. Sitting down with an estate planning attorney can help you catch those details and make any necessary changes.
There are a lot of changes that come with divorce, and finances are one of them. With the right team and the right preparation, however, you can handle these changes without the stress. If you have questions or are ready to move forward, call us today – our team is ready to help.
DISCLAIMER: Any information contained herein is solely for informational purposes and is only applicable in the state of Illinois. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, we urge you to contact a local attorney for advice pertaining to your specific legal needs.